Money-ridden UK councils are being pressured to flog their wares – promoting multi-million pound public belongings after being unable to stability their books.
Final week, Birmingham Metropolis Council hit headlines following revelations it had turn into the seventh native authority to turn into bankrupt after failing to handle its belongings.
The Labour-led council revealed in June that it confronted an equal pay legal responsibility of between £650million and £760million, rising between £5million and £14 million a month and now estimated to be greater than £1 billion.
Different native authorities are going through a mass of equal pay claims that threaten to tilt their already struggling coffers even additional – with 3,000 such claims in opposition to Cumberland, Glasgow, Dundee and Fife councils.
The GMB union can be understood to be amassing proof for additional equal pay claims in opposition to an extra 20 councils, including: ‘In all places we’re trying, we’re discovering issues.’
Money-ridden councils are having to flog their belongings as they’re unable to stability their books. Thurrock is seeking to elevate £90m, whereas Slough has obtained bids of £13.5m for a former leisure centre website
Kelvingrove Museum and Artwork Galleries was offered off by Glasgow’s native authority to go in the direction of elevating sufficient money to pay £770m in compensation to some 8,000 girls employed as cleaner and assistants after they took industrial motion
In Glasgow, some 8,000 girls employed as cleaner and assistants in homecare, colleges and nurseries took industrial motion earlier than the council agreed to pay £770m in compensation.
Councils with the largest debt burdens
Spelthorne: £1.1bn debt, 86.9x earnings
Woking: £1.97bn debt, 62x earnings
Eastleigh: £528m debt, 41.1x earnings
Runnymede: £643m debt, 23.4x earnings
Worthing: £204m debt, 14.4x earnings
Surrey Heath: £170m debt, 13.7x earnings
Rushmoor: £120m debt, 10.6x earnings
Cherwell: £188m debt, 10.3x earnings
Uttlesford: £301m debt, 10x earnings
Warrington: £1.8bn debt, 7.5x earnings
Supply: Moody’s Investor providers report. Borrowing figures are fiscal yr finish 2023, earnings most up-to-date yr accessible
To fund this, the native authority offered off council belongings, together with Glasgow’s Kelvingrove Museum and Artwork Galleries, The Guardian studies.
The Metropolis Council introduced its plans to promote the belongings final autumn as a part of a drive to lift £270million.
Political rivals together with former Scottish Inexperienced MSP Andy Wightman slammed the deal and insisted the council had no proper to make such an association, because the like of Metropolis Chambers and Kelvingrove Museum have been owned by the Frequent Good Fund and required authorized approval.
In November final yr, the council confirmed it didn’t plan to purchase the properties again from Metropolis Property Glasgow on the finish of their lease, the Scottish Each day Categorical reported. A council official confirmed that they are going to assessment the place when the time comes.
Thurrock Council introduced plans in the beginning of the yr to lift £90m via asset gross sales to assist fulfil its £470m funding hole.
Performing chief govt Ian Wake said that the authority had 5 choices to assist plug the hole, together with elevating council tax, asset disposal, income financial savings from rationalisation and transformation, development and distinctive monetary assist from the federal government.
Mark Coxshall, the Tory chief of the council stated: ‘For the time being, we’re £470m in debt which we won’t cowl and that’s the reason we’re needing to maneuver for distinctive monetary assist from the federal government.
‘These are surprising numbers however the first stage to creating a great plan for restoration is to grasp the total extent of the issue.’
Northamptonshire Council estimated it saved over £350,000 by closing down Knuston Corridor, close to Rushden, final September. The stately house is now available on the market for £2m
Croydon council purchased The Colonnades Retail Park for £53million in 2018 as a part of a deliberate funding portfolio. It has now a part of an inventory of 27 buildings it plans to unload in 2023/24
In Might, Croydon Council introduced plans to unload holdings of greater than 20 properties in an try to lift £50million throughout this monetary yr.
The council has revealed an inventory of 27 buildings it deliberate to unload 2023/24. Amongst its record of properties to be disposed of have been the Colonnades Retail Park and the previous New Addington Leisure Centre, and the Cherry Orchard Backyard Centre – staffed by volunteers with disabilities.
The portfolio additionally included the sale of 5 council homes which have been organized to be offered off to be able to clear the best way for the growth of Crystal Palace Soccer Membership’s Selhurst Park stadium.
Lots of the gross sales have been for properties the council had acquired as a part of a deliberate funding portfolio.
These embody The Colonnades, which was bought for £53million in 2018 and the next yr, the council purchased the Selco builders’ retailers warehouse constructing the workplaces of medical provides dealer Alliance Healthcare for a sum of £14million.
Following the legacy of Northamptonshire County Council, which was disbanded in 2021 after going bankrupt, certainly one of its successors sought to dump a few of its inherited belongings.
North Northamptonshire Council estimated it saved over £350,000 by closing down a Knuston Corridor, close to Rushden, final September after it stated it turned financially unviable to maintain it open.
Slough Borough Council declared itself bankrupt in 2021 with a borrowed debt totalling £760m. Plenty of belongings have been listed on the market to plug the black gap, together with the previous Montem Leisure Centre website (pictured). The positioning has since been demolished
Birmingham is the newest council to declare chapter, following within the footsteps of Hackney, Northampton, Croydon, Thurrock, Woking and Slough
The Grade II-listed former stately dwelling was used as a convention centre and school however closed in the course of the Covid pandemic.
It reopened briefly in 2021 earlier than closing once more in January 2022.
Subsequent survey discovered it didn’t meet authorized requirements and upkeep work would should be carried out.
The council’s govt director for finance and efficiency Janice Gotts stated it misplaced round £372,000 in related earnings from the corridor however made wage financial savings of £488,000 and web financial savings in operating prices of £241,000.
The corridor and its intensive grounds are available on the market for £2m.
Slough Borough Council declared chapter in 2021, owing £760m in borrowed debt. To plug the hole, it introduced plans to unload a portfolio together with a cinema, DIY retailer, grocery store and warehouse.
The previous Montem Leisure Centre website -which obtained obtained planning permission for 212 properties – was put up on the market in October final yr
An utility submitted by the council’s firm Slough City Renewal – a joint enterprise between the council and regeneration firm Muse, included inexpensive properties, “iconic buildings”, open areas, and leisure amenities.
The council can not embark on with capital tasks resulting from restrictions on spending for important providers whereas it reduces its debt.
The Moody’s investor providers analysis discovered that Spelthorne in Surrey had money owed valued at £1.1billion, 86.9 occasions its common earnings
Acquired within the Nineteen Thirties, the leisure centre was demolished in 2019/20 at the price of £500,000.
The council has obtained bids of roughly £13.5m for the positioning, and additionally put a former music venue, which hosted The Beatles and Jimi Hendrix, up on the market.
There are fears extra councils up and down the nation will go bust with one Surrey authority grappling a debt that’s 86.9 occasions its common earnings.
The Moody’s investor providers analysis discovered that Spelthorne in Surrey had money owed valued at £1.1billion.
That was a fair worse ratio than close by Woking, which has already issued a piece 114 order – which means it’s successfully bankrupt.
Astonishingly, the bosses at 5 cash-strapped councils going through chapter are pocketing the next wage than Prime Minister Rishi Sunak £167,391 wage.